Synergy boss ups ante on energy reform

Synergy chairman Lyndon Rowe has mapped out a detailed agenda for energy market reform, saying there would be catastrophic consequences if the government did not tackle market players with vested interests.

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Given that PV owners also use the grid to sell - maybe Synergy could be compensated by taking a clip of each sale transaction just like any other market platform provider. This could be more palatable than increasing fixed charges and more in line with the evolution of the network towards becoming a market platform rather than a one way pipe. This will be even more relevant once batteries become more commonplace and software is rolled out to allow peer-to-peer trading of electrons.

Cost to Synergy increases with solar?? Really Mr Lowe? How does that work? Is it due to the fact that we end up with localised generation putting less strain on infrastructure, less energy losses and therefore less costs in the future? Is that the extra costs? Or perhaps the fact that these households now use less power and require less infrastructure upgrades and maintenance to supply their power and their neighbors power maybe? Yes, this sounds like it makes more sense.
And Mike Nahan. How is it that the solar owners use the grid more extensively? By sending power BACK to the gird at a 1/4 of the price for their neighbors to use and AGAIN, put less strain on an old, aging infrastructure that you want to privatise.....Hang on a sec. The grid has less strain, less stress, and is LESS profitable for you to sell. Hmmm perhaps this is more so the case than anything else.
Nice arguments guys.....a small amount of truth would be a nice addition occasionally though. Just to change it up a bit you know.

Well said Zamien. Solar gives us distributed generation, with generation more closely located to consumption, meaning that LESS network is needed than with centralised generation. While this will not reduce the network costs immediately, it will lower the required network capacity increases over the long haul and thus lower the required investment.
And as a business case for Synergy, taking power from a solar system at 7.5c per unit, transporting it to a neighbour and selling it at more than 25c per unit gives a gross margin of 70% for an incremental cost of ZERO - wish my business could have access to that sort of opportunity!
Yes - some FACTS and TRUTH would go down well in this emotive argument.
If the issue is really the fixed cost of some $1600 per connection pa, then that is a real indictment of the Synergy operation and needs focussed attention to reduce.

Funny, I just made the calculations for going off grid. The numbers don't add up yet, but not too far off. I don't like his attitude of giving the advocate of the poor (his true interest is in Synergy's bottom-line).
So I will go off grid as a matter of principle..

The issue is relatively simple. Synergy has a very large investment in infrastructure affected by decreasing opportunities to spread those fixed costs as households adopt solar. Synergy's response is a typical monopoly response. Mr Rowe shouldn't dress this up as fairness with fancy arguments. The changes are simply a fairly straightforward method of maintaining revenues in face of decreasing demand. The challenge Synergy faces is that, due to technology changes, demand isn't inelastic.
The effect will be a more rapid uptake of increasingly cost effective battery technology as Synergy increases costs to consumers. Synergy's cost increases will be counter productive in the medium term as the opportunities to spread costs will continue to diminish at an increasing rate.

Good work BN (Saskia). Transparency and facts will not sit well with Synergy. With WA Govt. holding about 95% of the cards in the power game it is a bit thick to blame solar and privateers. Answers on why Synergy costs are so high, what are true levels of cross subsidy Govt. provides, and, why are we propping up aged infrastructure that is not needed would be good. Mr Rowe what about a paper on reducing overheads and operating costs to much lower levels?

As a solar panel owner for 7 years, I have not paid one cent to Synergy in that time. Yet I am using the grid to draw electricity at night and sometimes during the day. I use the grid to export my surplus energy. Fairness dictates that I should be making a financial contribution to the maintenance costs of the grid. The grid costs the same to maintain, whether I use it or not. The poles age , the wires oxidise over time. Safety switches need to be maintained. I get the benefit of all of this, but pay nothing towards it. The pensioner couple down the road, who don't have solar panels, are now subsidising my use of the grid! I want to pay my fair share for maintaining the grid. I am sure that all fair minded West Australians agree. And that will need a major change - namely a larger connection fee, and a lower per kilowatt hour consumed fee. My view is that electricity prices should be fully cost reflective. I don't think it is right that tax payers funds are used to subsidise the electricity bills of rich and poor alike. I am happy for low income earners/pensioners to get a helping hand, but the rest of us should pay what it really costs. Bring on the tariff review!

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